Three-year lease cost against a financed purchase with resale value subtracted — monthly loan payment, total interest, and which path keeps more cash.
Free toolNo signupFormula shown
Saved & recent
CHECK ENTRYSAVED
RESULT
—
FORMULA USEDLease vs Buy Calculator
Two ways to drive the same car
Leasing pays for the car’s expected depreciation plus a rent charge, then hands it back. Buying pays for the whole car, but part of every payment stays with you as equity you recover at resale. This calculator prices both paths in today’s dollars over a 36-month lease versus a full loan.
The math on each side
Lease total = down payment + monthly payment × 36. Buy side starts with the standard amortization formula M = P × r(1+r)ᵇ ÷ ((1+r)ᵇ − 1), where P is the loan amount, r the monthly rate, and n the term in months. The buy net cost = down + all payments − the car’s resale value at the end.
What the comparison leaves out
Both columns share the same down payment for a clean comparison. Not modeled: sales tax treatment (most states tax lease payments monthly), lease disposition and acquisition fees ($300–$1,000), higher required insurance limits on leases, and the excess-mileage charge if you drive past 12,000 miles a year. Add those before signing anything.
Worked example
A $30,000 car: $3,000 down, $400/month lease, or a 60-month loan at 4.5% APR.
Lease: $3,000 + 400 × 36 = $17,400 for three years.
Loan: $27,000 financed → about $503/month, $30,201 total payments.
Enter the negotiated price and the same down payment for both paths.
Type the lease payment the dealer quoted and your loan term and APR.
Estimate resale value at loan end — a 3-year-old version of the same car is a good proxy.
Compare the two totals and the difference headline before you negotiate.
Frequently asked questions
Is it cheaper to lease or buy a car?
Leasing usually costs less per month but more over repeated cycles, because you never stop paying depreciation. Over a single window with the same down payment, the answer depends mostly on the resale value you subtract — which is exactly what this comparison computes.
How is the monthly loan payment calculated?
With the standard amortization formula: the loan amount times the monthly rate, compounded over the term. A $27,000 loan at 4.5% APR for 60 months works out to about $503 a month.
What is residual value?
The projected worth of the car when the lease or loan ends. In this calculator the residual is applied to the buy side as the resale or trade-in you recover; a higher residual shrinks the buy net cost.
What happens if I exceed the lease mileage limit?
Most leases allow 12,000 miles a year and charge $0.15–$0.25 for every mile over. At $0.20, driving 15,000 miles a year on a 36-month lease adds about $1,800 at turn-in — enough to flip a close comparison.
Does the comparison account for fees and taxes?
Partly. It uses the same down payment on both sides but leaves out acquisition and disposition fees, sales tax differences, and insurance requirements. Those extras usually push the true lease total higher than quoted.
Should I buy the car at the end of the lease?
Compare the contractual purchase price with the car’s market value. When the buyout is below market, purchasing is a small win; when it is above, walk away and let the lessor absorb the mispricing.